Adelaide casino sets aside $45m to cover potential penalty as court case continues

The operator of the Adelaide Casino says it has put aside $45 million to cover a potential civil penalty from an anti-money laundering case in the Federal Court.

In a statement to the stock exchange, SkyCity said the casino’s operating licence had also been “impaired” by a further $45.6 million.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) launched Federal Court action against SkyCity in December, alleging systemic non-compliance with anti-money laundering and counter terrorism financing laws.

In the statement, SkyCity said there was “considerable uncertainty” about what any court penalty might be and that it could be significantly higher or lower than the $45 million it had set aside.

It said the court case was still at an early stage and it was working with AUSTRAC to agree on facts and potential admissions.

In a statement, SkyCity said AUSTRAC “has not detailed the amount of any civil penalty it proposes to seek.”

“Estimating the potential exposure to penalties with any degree of accuracy at this stage of that ongoing process remains challenging, particularly given the outcome is highly dependent on a range of factors which are not yet known.

“SkyCity Adelaide will continue to cooperate with AUSTRAC more generally, particularly in relation to the ongoing implementation of enhancements to its Adelaide Anti-Money Laundering and Counter-Terrorism Financing control frameworks.”

AUSTRAC’s court documents stated SkyCity “failed to carry out due diligence on 124 customers” — a breach of laws that could result in fines of more than $2 billion.

“Cash that was soiled with a strong aroma of dirt,” AUSTRAC wrote.

It also alleged that criminals laundered almost $4 billion at SkyCity’s Adelaide casino over a six-year period.

The documents also contained specific details about several customers including “customer 30”, who allegedly told the casino they worked as a chef at a small restaurant as their primary source of funds.

That customer, AUSTRAC has claimed, turned over more than $34 million in four years.

“Customer 30’s family network included individuals that had been convicted of drug dealing,” the court documents allege.

“On several occasions Customer 30’s known associates had presented cash that was soiled with a strong aroma of dirt.

“Customer 30 then received chips from these associates after the cash exchange.”

The customer was banned from the casino in August 2021.

The documents also outlined customers with links to organised crime, some of whom were suspected of loan sharking activities and another who was believed to have connections to human trafficking and sex slavery.

SkyCity said the decision to set aside $45 million would not impact the “normalise earnings” for the 2023 financial year which are forecast at $NZ 300 million to $NZ 310 million ($276 million to $286 million).

AUSTRAC has launched a similar prosecution against Star Entertainment, which owns casinos in New South Wales and Queensland.

While, in May, the Federal Court ordered Crown Melbourne and Crown Perth to pay a $450 million penalty for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.